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2012 Federal Tax Forms 1040a

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2012 Federal Tax Forms 1040a

2012 federal tax forms 1040a 1. 2012 federal tax forms 1040a   Traditional IRAs Table of Contents What's New for 2013 What's New for 2014 Introduction Who Can Open a Traditional IRA?What Is Compensation? When Can a Traditional IRA Be Opened? How Can a Traditional IRA Be Opened?Individual Retirement Account Individual Retirement Annuity Individual Retirement Bonds Simplified Employee Pension (SEP) Employer and Employee Association Trust Accounts Required Disclosures How Much Can Be Contributed?Limit. 2012 federal tax forms 1040a When repayment contributions can be made. 2012 federal tax forms 1040a No deduction. 2012 federal tax forms 1040a Reserve component. 2012 federal tax forms 1040a Figuring your IRA deduction. 2012 federal tax forms 1040a Reporting the repayment. 2012 federal tax forms 1040a Example. 2012 federal tax forms 1040a General Limit Kay Bailey Hutchison Spousal IRA Limit Filing Status Less Than Maximum Contributions More Than Maximum Contributions When Can Contributions Be Made? How Much Can You Deduct?Kay Bailey Hutchison Spousal IRA. 2012 federal tax forms 1040a Are You Covered by an Employer Plan? Limit if Covered by Employer Plan Reporting Deductible Contributions Nondeductible Contributions Examples — Worksheet for Reduced IRA Deduction for 2013 What if You Inherit an IRA?Treating it as your own. 2012 federal tax forms 1040a Can You Move Retirement Plan Assets?Transfers to Roth IRAs from other retirement plans. 2012 federal tax forms 1040a Trustee-to-Trustee Transfer Rollovers Transfers Incident To Divorce Converting From Any Traditional IRA Into a Roth IRA Recharacterizations When Can You Withdraw or Use Assets?Contributions Returned Before Due Date of Return When Must You Withdraw Assets? (Required Minimum Distributions)IRA Owners IRA Beneficiaries Which Table Do You Use To Determine Your Required Minimum Distribution? What Age(s) Do You Use With the Table(s)? Miscellaneous Rules for Required Minimum Distributions Are Distributions Taxable?January 2013 QCDs treated as made in 2012. 2012 federal tax forms 1040a 2013 Reporting. 2012 federal tax forms 1040a Additional reporting requirements if you made the election to treat a January 2013 QCD as made in 2012. 2012 federal tax forms 1040a One-time transfer. 2012 federal tax forms 1040a Testing period rules apply. 2012 federal tax forms 1040a More information. 2012 federal tax forms 1040a Distributions Fully or Partly Taxable Figuring the Nontaxable and Taxable Amounts Recognizing Losses on Traditional IRA Investments Other Special IRA Distribution Situations Reporting and Withholding Requirements for Taxable Amounts What Acts Result in Penalties or Additional Taxes?Prohibited Transactions Investment in Collectibles Excess Contributions Early Distributions Excess Accumulations (Insufficient Distributions) Reporting Additional Taxes What's New for 2013 Traditional IRA contribution and deduction limit. 2012 federal tax forms 1040a  The contribution limit to your traditional IRA for 2013 will be increased to the smaller of the following amounts: $5,500, or Your taxable compensation for the year. 2012 federal tax forms 1040a If you were age 50 or older before 2014, the most that can be contributed to your traditional IRA for 2013 will be the smaller of the following amounts: $6,500, or Your taxable compensation for the year. 2012 federal tax forms 1040a For more information, see How Much Can Be Contributed? in this chapter. 2012 federal tax forms 1040a Modified AGI limit for traditional IRA contributions increased. 2012 federal tax forms 1040a  For 2013, if you were covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is: More than $95,000 but less than $115,000 for a married couple filing a joint return or a qualifying widow(er), More than $59,000 but less than $69,000 for a single individual or head of household, or Less than $10,000 for a married individual filing a separate return. 2012 federal tax forms 1040a If you either lived with your spouse or file a joint return, and your spouse was covered by a retirement plan at work, but you were not, your deduction is phased out if your modified AGI is more than $178,000 but less than $188,000. 2012 federal tax forms 1040a If your modified AGI is $188,000 or more, you cannot take a deduction for contributions to a traditional IRA. 2012 federal tax forms 1040a See How Much Can You Deduct? in this chapter. 2012 federal tax forms 1040a Net Investment Income Tax. 2012 federal tax forms 1040a  For purposes of the Net Investment Income Tax (NIIT), net investment income does not include distributions from a qualified retirement plan (for example, 401(a), 403(a), 403(b), 457(b) plans, and IRAs). 2012 federal tax forms 1040a However, these distributions are taken into account when determining the modified adjusted gross income threshold. 2012 federal tax forms 1040a Distributions from a nonqualified retirement plan are included in net investment income. 2012 federal tax forms 1040a See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information. 2012 federal tax forms 1040a What's New for 2014 Modified AGI limit for traditional IRA contributions increased. 2012 federal tax forms 1040a  For 2014, if you are covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is: More than $96,000 but less than $116,000 for a married couple filing a joint return or a qualifying widow(er), More than $60,000 but less than $70,000 for a single individual or head of household, or Less than $10,000 for a married individual filing a separate return. 2012 federal tax forms 1040a If you either live with your spouse or file a joint return, and your spouse is covered by a retirement plan at work, but you are not, your deduction is phased out if your modified AGI is more than $181,000 but less than $191,000. 2012 federal tax forms 1040a If your modified AGI is $191,000 or more, you cannot take a deduction for contributions to a traditional IRA. 2012 federal tax forms 1040a Introduction This chapter discusses the original IRA. 2012 federal tax forms 1040a In this publication the original IRA (sometimes called an ordinary or regular IRA) is referred to as a “traditional IRA. 2012 federal tax forms 1040a ” A traditional IRA is any IRA that is not a Roth IRA or a SIMPLE IRA. 2012 federal tax forms 1040a The following are two advantages of a traditional IRA: You may be able to deduct some or all of your contributions to it, depending on your circumstances. 2012 federal tax forms 1040a Generally, amounts in your IRA, including earnings and gains, are not taxed until they are distributed. 2012 federal tax forms 1040a Who Can Open a Traditional IRA? You can open and make contributions to a traditional IRA if: You (or, if you file a joint return, your spouse) received taxable compensation during the year, and You were not age 70½ by the end of the year. 2012 federal tax forms 1040a You can have a traditional IRA whether or not you are covered by any other retirement plan. 2012 federal tax forms 1040a However, you may not be able to deduct all of your contributions if you or your spouse is covered by an employer retirement plan. 2012 federal tax forms 1040a See How Much Can You Deduct , later. 2012 federal tax forms 1040a Both spouses have compensation. 2012 federal tax forms 1040a   If both you and your spouse have compensation and are under age 70½, each of you can open an IRA. 2012 federal tax forms 1040a You cannot both participate in the same IRA. 2012 federal tax forms 1040a If you file a joint return, only one of you needs to have compensation. 2012 federal tax forms 1040a What Is Compensation? Generally, compensation is what you earn from working. 2012 federal tax forms 1040a For a summary of what compensation does and does not include, see Table 1-1. 2012 federal tax forms 1040a Compensation includes all of the items discussed next (even if you have more than one type). 2012 federal tax forms 1040a Wages, salaries, etc. 2012 federal tax forms 1040a   Wages, salaries, tips, professional fees, bonuses, and other amounts you receive for providing personal services are compensation. 2012 federal tax forms 1040a The IRS treats as compensation any amount properly shown in box 1 (Wages, tips, other compensation) of Form W-2, Wage and Tax Statement, provided that amount is reduced by any amount properly shown in box 11 (Nonqualified plans). 2012 federal tax forms 1040a Scholarship and fellowship payments are compensation for IRA purposes only if shown in box 1 of Form W-2. 2012 federal tax forms 1040a Commissions. 2012 federal tax forms 1040a   An amount you receive that is a percentage of profits or sales price is compensation. 2012 federal tax forms 1040a Self-employment income. 2012 federal tax forms 1040a   If you are self-employed (a sole proprietor or a partner), compensation is the net earnings from your trade or business (provided your personal services are a material income-producing factor) reduced by the total of: The deduction for contributions made on your behalf to retirement plans, and The deduction allowed for the deductible part of your self-employment taxes. 2012 federal tax forms 1040a   Compensation includes earnings from self-employment even if they are not subject to self-employment tax because of your religious beliefs. 2012 federal tax forms 1040a Self-employment loss. 2012 federal tax forms 1040a   If you have a net loss from self-employment, do not subtract the loss from your salaries or wages when figuring your total compensation. 2012 federal tax forms 1040a Alimony and separate maintenance. 2012 federal tax forms 1040a   For IRA purposes, compensation includes any taxable alimony and separate maintenance payments you receive under a decree of divorce or separate maintenance. 2012 federal tax forms 1040a Nontaxable combat pay. 2012 federal tax forms 1040a   If you were a member of the U. 2012 federal tax forms 1040a S. 2012 federal tax forms 1040a Armed Forces, compensation includes any nontaxable combat pay you received. 2012 federal tax forms 1040a This amount should be reported in box 12 of your 2013 Form W-2 with code Q. 2012 federal tax forms 1040a Table 1-1. 2012 federal tax forms 1040a Compensation for Purposes of an IRA Includes . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a Does not include . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a   earnings and profits from property. 2012 federal tax forms 1040a wages, salaries, etc. 2012 federal tax forms 1040a     interest and dividend income. 2012 federal tax forms 1040a commissions. 2012 federal tax forms 1040a     pension or annuity income. 2012 federal tax forms 1040a self-employment income. 2012 federal tax forms 1040a     deferred compensation. 2012 federal tax forms 1040a alimony and separate maintenance. 2012 federal tax forms 1040a     income from certain  partnerships. 2012 federal tax forms 1040a nontaxable combat pay. 2012 federal tax forms 1040a     any amounts you exclude from income. 2012 federal tax forms 1040a     What Is Not Compensation? Compensation does not include any of the following items. 2012 federal tax forms 1040a Earnings and profits from property, such as rental income, interest income, and dividend income. 2012 federal tax forms 1040a Pension or annuity income. 2012 federal tax forms 1040a Deferred compensation received (compensation payments postponed from a past year). 2012 federal tax forms 1040a Income from a partnership for which you do not provide services that are a material income-producing factor. 2012 federal tax forms 1040a Conservation Reserve Program (CRP) payments reported on Schedule SE (Form 1040), line 1b. 2012 federal tax forms 1040a Any amounts (other than combat pay) you exclude from income, such as foreign earned income and housing costs. 2012 federal tax forms 1040a When Can a Traditional IRA Be Opened? You can open a traditional IRA at any time. 2012 federal tax forms 1040a However, the time for making contributions for any year is limited. 2012 federal tax forms 1040a See When Can Contributions Be Made , later. 2012 federal tax forms 1040a How Can a Traditional IRA Be Opened? You can open different kinds of IRAs with a variety of organizations. 2012 federal tax forms 1040a You can open an IRA at a bank or other financial institution or with a mutual fund or life insurance company. 2012 federal tax forms 1040a You can also open an IRA through your stockbroker. 2012 federal tax forms 1040a Any IRA must meet Internal Revenue Code requirements. 2012 federal tax forms 1040a The requirements for the various arrangements are discussed below. 2012 federal tax forms 1040a Kinds of traditional IRAs. 2012 federal tax forms 1040a   Your traditional IRA can be an individual retirement account or annuity. 2012 federal tax forms 1040a It can be part of either a simplified employee pension (SEP) or an employer or employee association trust account. 2012 federal tax forms 1040a Individual Retirement Account An individual retirement account is a trust or custodial account set up in the United States for the exclusive benefit of you or your beneficiaries. 2012 federal tax forms 1040a The account is created by a written document. 2012 federal tax forms 1040a The document must show that the account meets all of the following requirements. 2012 federal tax forms 1040a The trustee or custodian must be a bank, a federally insured credit union, a savings and loan association, or an entity approved by the IRS to act as trustee or custodian. 2012 federal tax forms 1040a The trustee or custodian generally cannot accept contributions of more than the deductible amount for the year. 2012 federal tax forms 1040a However, rollover contributions and employer contributions to a simplified employee pension (SEP) can be more than this amount. 2012 federal tax forms 1040a Contributions, except for rollover contributions, must be in cash. 2012 federal tax forms 1040a See Rollovers , later. 2012 federal tax forms 1040a You must have a nonforfeitable right to the amount at all times. 2012 federal tax forms 1040a Money in your account cannot be used to buy a life insurance policy. 2012 federal tax forms 1040a Assets in your account cannot be combined with other property, except in a common trust fund or common investment fund. 2012 federal tax forms 1040a You must start receiving distributions by April 1 of the year following the year in which you reach age 70½. 2012 federal tax forms 1040a See When Must You Withdraw Assets? (Required Minimum Distributions) , later. 2012 federal tax forms 1040a Individual Retirement Annuity You can open an individual retirement annuity by purchasing an annuity contract or an endowment contract from a life insurance company. 2012 federal tax forms 1040a An individual retirement annuity must be issued in your name as the owner, and either you or your beneficiaries who survive you are the only ones who can receive the benefits or payments. 2012 federal tax forms 1040a An individual retirement annuity must meet all the following requirements. 2012 federal tax forms 1040a Your entire interest in the contract must be nonforfeitable. 2012 federal tax forms 1040a The contract must provide that you cannot transfer any portion of it to any person other than the issuer. 2012 federal tax forms 1040a There must be flexible premiums so that if your compensation changes, your payment can also change. 2012 federal tax forms 1040a This provision applies to contracts issued after November 6, 1978. 2012 federal tax forms 1040a The contract must provide that contributions cannot be more than the deductible amount for an IRA for the year, and that you must use any refunded premiums to pay for future premiums or to buy more benefits before the end of the calendar year after the year in which you receive the refund. 2012 federal tax forms 1040a Distributions must begin by April 1 of the year following the year in which you reach age 70½. 2012 federal tax forms 1040a See When Must You Withdraw Assets? (Required Minimum Distributions) , later. 2012 federal tax forms 1040a Individual Retirement Bonds The sale of individual retirement bonds issued by the federal government was suspended after April 30, 1982. 2012 federal tax forms 1040a The bonds have the following features. 2012 federal tax forms 1040a They stop earning interest when you reach age 70½. 2012 federal tax forms 1040a If you die, interest will stop 5 years after your death, or on the date you would have reached age 70½, whichever is earlier. 2012 federal tax forms 1040a You cannot transfer the bonds. 2012 federal tax forms 1040a If you cash (redeem) the bonds before the year in which you reach age 59½, you may be subject to a 10% additional tax. 2012 federal tax forms 1040a See Age 59½ Rule under Early Distributions, later. 2012 federal tax forms 1040a You can roll over redemption proceeds into IRAs. 2012 federal tax forms 1040a Simplified Employee Pension (SEP) A simplified employee pension (SEP) is a written arrangement that allows your employer to make deductible contributions to a traditional IRA (a SEP IRA) set up for you to receive such contributions. 2012 federal tax forms 1040a Generally, distributions from SEP IRAs are subject to the withdrawal and tax rules that apply to traditional IRAs. 2012 federal tax forms 1040a See Publication 560 for more information about SEPs. 2012 federal tax forms 1040a Employer and Employee Association Trust Accounts Your employer or your labor union or other employee association can set up a trust to provide individual retirement accounts for employees or members. 2012 federal tax forms 1040a The requirements for individual retirement accounts apply to these traditional IRAs. 2012 federal tax forms 1040a Required Disclosures The trustee or issuer (sometimes called the sponsor) of your traditional IRA generally must give you a disclosure statement at least 7 days before you open your IRA. 2012 federal tax forms 1040a However, the sponsor does not have to give you the statement until the date you open (or purchase, if earlier) your IRA, provided you are given at least 7 days from that date to revoke the IRA. 2012 federal tax forms 1040a The disclosure statement must explain certain items in plain language. 2012 federal tax forms 1040a For example, the statement should explain when and how you can revoke the IRA, and include the name, address, and telephone number of the person to receive the notice of cancellation. 2012 federal tax forms 1040a This explanation must appear at the beginning of the disclosure statement. 2012 federal tax forms 1040a If you revoke your IRA within the revocation period, the sponsor must return to you the entire amount you paid. 2012 federal tax forms 1040a The sponsor must report on the appropriate IRS forms both your contribution to the IRA (unless it was made by a trustee-to-trustee transfer) and the amount returned to you. 2012 federal tax forms 1040a These requirements apply to all sponsors. 2012 federal tax forms 1040a How Much Can Be Contributed? There are limits and other rules that affect the amount that can be contributed to a traditional IRA. 2012 federal tax forms 1040a These limits and rules are explained below. 2012 federal tax forms 1040a Community property laws. 2012 federal tax forms 1040a   Except as discussed later under Kay Bailey Hutchison Spousal IRA Limit , each spouse figures his or her limit separately, using his or her own compensation. 2012 federal tax forms 1040a This is the rule even in states with community property laws. 2012 federal tax forms 1040a Brokers' commissions. 2012 federal tax forms 1040a   Brokers' commissions paid in connection with your traditional IRA are subject to the contribution limit. 2012 federal tax forms 1040a For information about whether you can deduct brokers' commissions, see Brokers' commissions , later, under How Much Can You Deduct. 2012 federal tax forms 1040a Trustees' fees. 2012 federal tax forms 1040a   Trustees' administrative fees are not subject to the contribution limit. 2012 federal tax forms 1040a For information about whether you can deduct trustees' fees, see Trustees' fees , later, under How Much Can You Deduct. 2012 federal tax forms 1040a Qualified reservist repayments. 2012 federal tax forms 1040a   If you were a member of a reserve component and you were ordered or called to active duty after September 11, 2001, you may be able to contribute (repay) to an IRA amounts equal to any qualified reservist distributions (defined later under Early Distributions) you received. 2012 federal tax forms 1040a You can make these repayment contributions even if they would cause your total contributions to the IRA to be more than the general limit on contributions. 2012 federal tax forms 1040a To be eligible to make these repayment contributions, you must have received a qualified reservist distribution from an IRA or from a section 401(k) or 403(b) plan or a similar arrangement. 2012 federal tax forms 1040a Limit. 2012 federal tax forms 1040a   Your qualified reservist repayments cannot be more than your qualified reservist distributions, explained under Early Distributions , later. 2012 federal tax forms 1040a When repayment contributions can be made. 2012 federal tax forms 1040a   You cannot make these repayment contributions later than the date that is 2 years after your active duty period ends. 2012 federal tax forms 1040a No deduction. 2012 federal tax forms 1040a   You cannot deduct qualified reservist repayments. 2012 federal tax forms 1040a Reserve component. 2012 federal tax forms 1040a   The term “reserve component” means the: Army National Guard of the United States, Army Reserve, Naval Reserve, Marine Corps Reserve, Air National Guard of the United States, Air Force Reserve, Coast Guard Reserve, or Reserve Corps of the Public Health Service. 2012 federal tax forms 1040a Figuring your IRA deduction. 2012 federal tax forms 1040a   The repayment of qualified reservist distributions does not affect the amount you can deduct as an IRA contribution. 2012 federal tax forms 1040a Reporting the repayment. 2012 federal tax forms 1040a   If you repay a qualified reservist distribution, include the amount of the repayment with nondeductible contributions on line 1 of Form 8606. 2012 federal tax forms 1040a Example. 2012 federal tax forms 1040a   In 2013, your IRA contribution limit is $5,500. 2012 federal tax forms 1040a However, because of your filing status and AGI, the limit on the amount you can deduct is $3,500. 2012 federal tax forms 1040a You can make a nondeductible contribution of $2,000 ($5,500 - $3,500). 2012 federal tax forms 1040a In an earlier year you received a $3,000 qualified reservist distribution, which you would like to repay this year. 2012 federal tax forms 1040a   For 2013, you can contribute a total of $8,500 to your IRA. 2012 federal tax forms 1040a This is made up of the maximum deductible contribution of $3,500; a nondeductible contribution of $2,000; and a $3,000 qualified reservist repayment. 2012 federal tax forms 1040a You contribute the maximum allowable for the year. 2012 federal tax forms 1040a Since you are making a nondeductible contribution ($2,000) and a qualified reservist repayment ($3,000), you must file Form 8606 with your return and include $5,000 ($2,000 + $3,000) on line 1 of Form 8606. 2012 federal tax forms 1040a The qualified reservist repayment is not deductible. 2012 federal tax forms 1040a Contributions on your behalf to a traditional IRA reduce your limit for contributions to a Roth IRA. 2012 federal tax forms 1040a See chapter 2 for information about Roth IRAs. 2012 federal tax forms 1040a General Limit For 2013, the most that can be contributed to your traditional IRA generally is the smaller of the following amounts: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation (defined earlier) for the year. 2012 federal tax forms 1040a Note. 2012 federal tax forms 1040a This limit is reduced by any contributions to a section 501(c)(18) plan (generally, a pension plan created before June 25, 1959, that is funded entirely by employee contributions). 2012 federal tax forms 1040a This is the most that can be contributed regardless of whether the contributions are to one or more traditional IRAs or whether all or part of the contributions are nondeductible. 2012 federal tax forms 1040a (See Nondeductible Contributions , later. 2012 federal tax forms 1040a ) Qualified reservist repayments do not affect this limit. 2012 federal tax forms 1040a Examples. 2012 federal tax forms 1040a George, who is 34 years old and single, earns $24,000 in 2013. 2012 federal tax forms 1040a His IRA contributions for 2013 are limited to $5,500. 2012 federal tax forms 1040a Danny, an unmarried college student working part time, earns $3,500 in 2013. 2012 federal tax forms 1040a His IRA contributions for 2013 are limited to $3,500, the amount of his compensation. 2012 federal tax forms 1040a More than one IRA. 2012 federal tax forms 1040a   If you have more than one IRA, the limit applies to the total contributions made on your behalf to all your traditional IRAs for the year. 2012 federal tax forms 1040a Annuity or endowment contracts. 2012 federal tax forms 1040a   If you invest in an annuity or endowment contract under an individual retirement annuity, no more than $5,500 ($6,500 if you are age 50 or older) can be contributed toward its cost for the tax year, including the cost of life insurance coverage. 2012 federal tax forms 1040a If more than this amount is contributed, the annuity or endowment contract is disqualified. 2012 federal tax forms 1040a Kay Bailey Hutchison Spousal IRA Limit For 2013, if you file a joint return and your taxable compensation is less than that of your spouse, the most that can be contributed for the year to your IRA is the smaller of the following two amounts: $5,500 ($6,500 if you are age 50 or older), or The total compensation includible in the gross income of both you and your spouse for the year, reduced by the following two amounts. 2012 federal tax forms 1040a Your spouse's IRA contribution for the year to a traditional IRA. 2012 federal tax forms 1040a Any contributions for the year to a Roth IRA on behalf of your spouse. 2012 federal tax forms 1040a This means that the total combined contributions that can be made for the year to your IRA and your spouse's IRA can be as much as $11,000 ($12,000 if only one of you is age 50 or older or $13,000 if both of you are age 50 or older). 2012 federal tax forms 1040a Note. 2012 federal tax forms 1040a This traditional IRA limit is reduced by any contributions to a section 501(c)(18) plan (generally, a pension plan created before June 25, 1959, that is funded entirely by employee contributions). 2012 federal tax forms 1040a Example. 2012 federal tax forms 1040a Kristin, a full-time student with no taxable compensation, marries Carl during the year. 2012 federal tax forms 1040a Neither of them was age 50 by the end of 2013. 2012 federal tax forms 1040a For the year, Carl has taxable compensation of $30,000. 2012 federal tax forms 1040a He plans to contribute (and deduct) $5,500 to a traditional IRA. 2012 federal tax forms 1040a If he and Kristin file a joint return, each can contribute $5,500 to a traditional IRA. 2012 federal tax forms 1040a This is because Kristin, who has no compensation, can add Carl's compensation, reduced by the amount of his IRA contribution ($30,000 − $5,500 = $24,500), to her own compensation (-0-) to figure her maximum contribution to a traditional IRA. 2012 federal tax forms 1040a In her case, $5,500 is her contribution limit, because $5,500 is less than $24,500 (her compensation for purposes of figuring her contribution limit). 2012 federal tax forms 1040a Filing Status Generally, except as discussed earlier under Kay Bailey Hutchison Spousal IRA Limit , your filing status has no effect on the amount of allowable contributions to your traditional IRA. 2012 federal tax forms 1040a However, if during the year either you or your spouse was covered by a retirement plan at work, your deduction may be reduced or eliminated, depending on your filing status and income. 2012 federal tax forms 1040a See How Much Can You Deduct , later. 2012 federal tax forms 1040a Example. 2012 federal tax forms 1040a Tom and Darcy are married and both are 53. 2012 federal tax forms 1040a They both work and each has a traditional IRA. 2012 federal tax forms 1040a Tom earned $3,800 and Darcy earned $48,000 in 2013. 2012 federal tax forms 1040a Because of the Kay Bailey Hutchison Spousal IRA limit rule, even though Tom earned less than $6,500, they can contribute up to $6,500 to his IRA for 2013 if they file a joint return. 2012 federal tax forms 1040a They can contribute up to $6,500 to Darcy's IRA. 2012 federal tax forms 1040a If they file separate returns, the amount that can be contributed to Tom's IRA is limited by his earned income, $3,800. 2012 federal tax forms 1040a Less Than Maximum Contributions If contributions to your traditional IRA for a year were less than the limit, you cannot contribute more after the due date of your return for that year to make up the difference. 2012 federal tax forms 1040a Example. 2012 federal tax forms 1040a Rafael, who is 40, earns $30,000 in 2013. 2012 federal tax forms 1040a Although he can contribute up to $5,500 for 2013, he contributes only $3,000. 2012 federal tax forms 1040a After April 15, 2014, Rafael cannot make up the difference between his actual contributions for 2013 ($3,000) and his 2013 limit ($5,500). 2012 federal tax forms 1040a He cannot contribute $2,500 more than the limit for any later year. 2012 federal tax forms 1040a More Than Maximum Contributions If contributions to your IRA for a year were more than the limit, you can apply the excess contribution in one year to a later year if the contributions for that later year are less than the maximum allowed for that year. 2012 federal tax forms 1040a However, a penalty or additional tax may apply. 2012 federal tax forms 1040a See Excess Contributions , later, under What Acts Result in Penalties or Additional Taxes. 2012 federal tax forms 1040a When Can Contributions Be Made? As soon as you open your traditional IRA, contributions can be made to it through your chosen sponsor (trustee or other administrator). 2012 federal tax forms 1040a Contributions must be in the form of money (cash, check, or money order). 2012 federal tax forms 1040a Property cannot be contributed. 2012 federal tax forms 1040a Although property cannot be contributed, your IRA may invest in certain property. 2012 federal tax forms 1040a For example, your IRA may purchase shares of stock. 2012 federal tax forms 1040a For other restrictions on the use of funds in your IRA, see Prohibited Transactions , later in this chapter. 2012 federal tax forms 1040a You may be able to transfer or roll over certain property from one retirement plan to another. 2012 federal tax forms 1040a See the discussion of rollovers and other transfers later in this chapter under Can You Move Retirement Plan Assets . 2012 federal tax forms 1040a You can make a contribution to your IRA by having your income tax refund (or a portion of your refund), if any, paid directly to your traditional IRA, Roth IRA, or SEP IRA. 2012 federal tax forms 1040a For details, see the instructions for your income tax return or Form 8888, Allocation of Refund (Including Savings Bond Purchases). 2012 federal tax forms 1040a Contributions can be made to your traditional IRA for each year that you receive compensation and have not reached age 70½. 2012 federal tax forms 1040a For any year in which you do not work, contributions cannot be made to your IRA unless you receive alimony, nontaxable combat pay, military differential pay, or file a joint return with a spouse who has compensation. 2012 federal tax forms 1040a See Who Can Open a Traditional IRA , earlier. 2012 federal tax forms 1040a Even if contributions cannot be made for the current year, the amounts contributed for years in which you did qualify can remain in your IRA. 2012 federal tax forms 1040a Contributions can resume for any years that you qualify. 2012 federal tax forms 1040a Contributions must be made by due date. 2012 federal tax forms 1040a   Contributions can be made to your traditional IRA for a year at any time during the year or by the due date for filing your return for that year, not including extensions. 2012 federal tax forms 1040a For most people, this means that contributions for 2013 must be made by April 15, 2014, and contributions for 2014 must be made by April 15, 2015. 2012 federal tax forms 1040a Age 70½ rule. 2012 federal tax forms 1040a   Contributions cannot be made to your traditional IRA for the year in which you reach age 70½ or for any later year. 2012 federal tax forms 1040a   You attain age 70½ on the date that is 6 calendar months after the 70th anniversary of your birth. 2012 federal tax forms 1040a If you were born on or before June 30, 1943, you cannot contribute for 2013 or any later year. 2012 federal tax forms 1040a Designating year for which contribution is made. 2012 federal tax forms 1040a   If an amount is contributed to your traditional IRA between January 1 and April 15, you should tell the sponsor which year (the current year or the previous year) the contribution is for. 2012 federal tax forms 1040a If you do not tell the sponsor which year it is for, the sponsor can assume, and report to the IRS, that the contribution is for the current year (the year the sponsor received it). 2012 federal tax forms 1040a Filing before a contribution is made. 2012 federal tax forms 1040a    You can file your return claiming a traditional IRA contribution before the contribution is actually made. 2012 federal tax forms 1040a Generally, the contribution must be made by the due date of your return, not including extensions. 2012 federal tax forms 1040a Contributions not required. 2012 federal tax forms 1040a   You do not have to contribute to your traditional IRA for every tax year, even if you can. 2012 federal tax forms 1040a How Much Can You Deduct? Generally, you can deduct the lesser of: The contributions to your traditional IRA for the year, or The general limit (or the Kay Bailey Hutchison Spousal IRA limit, if applicable) explained earlier under How Much Can Be Contributed . 2012 federal tax forms 1040a However, if you or your spouse was covered by an employer retirement plan, you may not be able to deduct this amount. 2012 federal tax forms 1040a See Limit if Covered by Employer Plan , later. 2012 federal tax forms 1040a You may be able to claim a credit for contributions to your traditional IRA. 2012 federal tax forms 1040a For more information, see chapter 4. 2012 federal tax forms 1040a Trustees' fees. 2012 federal tax forms 1040a   Trustees' administrative fees that are billed separately and paid in connection with your traditional IRA are not deductible as IRA contributions. 2012 federal tax forms 1040a However, they may be deductible as a miscellaneous itemized deduction on Schedule A (Form 1040). 2012 federal tax forms 1040a For information about miscellaneous itemized deductions, see Publication 529, Miscellaneous Deductions. 2012 federal tax forms 1040a Brokers' commissions. 2012 federal tax forms 1040a   These commissions are part of your IRA contribution and, as such, are deductible subject to the limits. 2012 federal tax forms 1040a Full deduction. 2012 federal tax forms 1040a   If neither you nor your spouse was covered for any part of the year by an employer retirement plan, you can take a deduction for total contributions to one or more of your traditional IRAs of up to the lesser of: $5,500 ($6,500 if you are age 50 or older), or 100% of your compensation. 2012 federal tax forms 1040a   This limit is reduced by any contributions made to a 501(c)(18) plan on your behalf. 2012 federal tax forms 1040a Kay Bailey Hutchison Spousal IRA. 2012 federal tax forms 1040a   In the case of a married couple with unequal compensation who file a joint return, the deduction for contributions to the traditional IRA of the spouse with less compensation is limited to the lesser of: $5,500 ($6,500 if the spouse with the lower compensation is age 50 or older), or The total compensation includible in the gross income of both spouses for the year reduced by the following three amounts. 2012 federal tax forms 1040a The IRA deduction for the year of the spouse with the greater compensation. 2012 federal tax forms 1040a Any designated nondeductible contribution for the year made on behalf of the spouse with the greater compensation. 2012 federal tax forms 1040a Any contributions for the year to a Roth IRA on behalf of the spouse with the greater compensation. 2012 federal tax forms 1040a   This limit is reduced by any contributions to a section 501(c)(18) plan on behalf of the spouse with the lesser compensation. 2012 federal tax forms 1040a Note. 2012 federal tax forms 1040a If you were divorced or legally separated (and did not remarry) before the end of the year, you cannot deduct any contributions to your spouse's IRA. 2012 federal tax forms 1040a After a divorce or legal separation, you can deduct only the contributions to your own IRA. 2012 federal tax forms 1040a Your deductions are subject to the rules for single individuals. 2012 federal tax forms 1040a Covered by an employer retirement plan. 2012 federal tax forms 1040a   If you or your spouse was covered by an employer retirement plan at any time during the year for which contributions were made, your deduction may be further limited. 2012 federal tax forms 1040a This is discussed later under Limit if Covered by Employer Plan . 2012 federal tax forms 1040a Limits on the amount you can deduct do not affect the amount that can be contributed. 2012 federal tax forms 1040a Are You Covered by an Employer Plan? The Form W-2 you receive from your employer has a box used to indicate whether you were covered for the year. 2012 federal tax forms 1040a The “Retirement Plan” box should be checked if you were covered. 2012 federal tax forms 1040a Reservists and volunteer firefighters should also see Situations in Which You Are Not Covered , later. 2012 federal tax forms 1040a If you are not certain whether you were covered by your employer's retirement plan, you should ask your employer. 2012 federal tax forms 1040a Federal judges. 2012 federal tax forms 1040a   For purposes of the IRA deduction, federal judges are covered by an employer plan. 2012 federal tax forms 1040a For Which Year(s) Are You Covered? Special rules apply to determine the tax years for which you are covered by an employer plan. 2012 federal tax forms 1040a These rules differ depending on whether the plan is a defined contribution plan or a defined benefit plan. 2012 federal tax forms 1040a Tax year. 2012 federal tax forms 1040a   Your tax year is the annual accounting period you use to keep records and report income and expenses on your income tax return. 2012 federal tax forms 1040a For almost all people, the tax year is the calendar year. 2012 federal tax forms 1040a Defined contribution plan. 2012 federal tax forms 1040a   Generally, you are covered by a defined contribution plan for a tax year if amounts are contributed or allocated to your account for the plan year that ends with or within that tax year. 2012 federal tax forms 1040a However, also see Situations in Which You Are Not Covered , later. 2012 federal tax forms 1040a   A defined contribution plan is a plan that provides for a separate account for each person covered by the plan. 2012 federal tax forms 1040a In a defined contribution plan, the amount to be contributed to each participant's account is spelled out in the plan. 2012 federal tax forms 1040a The level of benefits actually provided to a participant depends on the total amount contributed to that participant's account and any earnings and losses on those contributions. 2012 federal tax forms 1040a Types of defined contribution plans include profit-sharing plans, stock bonus plans, and money purchase pension plans. 2012 federal tax forms 1040a Example. 2012 federal tax forms 1040a Company A has a money purchase pension plan. 2012 federal tax forms 1040a Its plan year is from July 1 to June 30. 2012 federal tax forms 1040a The plan provides that contributions must be allocated as of June 30. 2012 federal tax forms 1040a Bob, an employee, leaves Company A on December 31, 2012. 2012 federal tax forms 1040a The contribution for the plan year ending on June 30, 2013, is made February 15, 2014. 2012 federal tax forms 1040a Because an amount is contributed to Bob's account for the plan year, Bob is covered by the plan for his 2013 tax year. 2012 federal tax forms 1040a   A special rule applies to certain plans in which it is not possible to determine if an amount will be contributed to your account for a given plan year. 2012 federal tax forms 1040a If, for a plan year, no amounts have been allocated to your account that are attributable to employer contributions, employee contributions, or forfeitures, by the last day of the plan year, and contributions are discretionary for the plan year, you are not covered for the tax year in which the plan year ends. 2012 federal tax forms 1040a If, after the plan year ends, the employer makes a contribution for that plan year, you are covered for the tax year in which the contribution is made. 2012 federal tax forms 1040a Example. 2012 federal tax forms 1040a Mickey was covered by a profit-sharing plan and left the company on December 31, 2012. 2012 federal tax forms 1040a The plan year runs from July 1 to June 30. 2012 federal tax forms 1040a Under the terms of the plan, employer contributions do not have to be made, but if they are made, they are contributed to the plan before the due date for filing the company's tax return. 2012 federal tax forms 1040a Such contributions are allocated as of the last day of the plan year, and allocations are made to the accounts of individuals who have any service during the plan year. 2012 federal tax forms 1040a As of June 30, 2013, no contributions were made that were allocated to the June 30, 2013, plan year, and no forfeitures had been allocated within the plan year. 2012 federal tax forms 1040a In addition, as of that date, the company was not obligated to make a contribution for such plan year and it was impossible to determine whether or not a contribution would be made for the plan year. 2012 federal tax forms 1040a On December 31, 2013, the company decided to contribute to the plan for the plan year ending June 30, 2013. 2012 federal tax forms 1040a That contribution was made on February 15, 2014. 2012 federal tax forms 1040a Mickey is an active participant in the plan for his 2014 tax year but not for his 2013 tax year. 2012 federal tax forms 1040a No vested interest. 2012 federal tax forms 1040a   If an amount is allocated to your account for a plan year, you are covered by that plan even if you have no vested interest in (legal right to) the account. 2012 federal tax forms 1040a Defined benefit plan. 2012 federal tax forms 1040a   If you are eligible to participate in your employer's defined benefit plan for the plan year that ends within your tax year, you are covered by the plan. 2012 federal tax forms 1040a This rule applies even if you: Declined to participate in the plan, Did not make a required contribution, or Did not perform the minimum service required to accrue a benefit for the year. 2012 federal tax forms 1040a   A defined benefit plan is any plan that is not a defined contribution plan. 2012 federal tax forms 1040a In a defined benefit plan, the level of benefits to be provided to each participant is spelled out in the plan. 2012 federal tax forms 1040a The plan administrator figures the amount needed to provide those benefits and those amounts are contributed to the plan. 2012 federal tax forms 1040a Defined benefit plans include pension plans and annuity plans. 2012 federal tax forms 1040a Example. 2012 federal tax forms 1040a Nick, an employee of Company B, is eligible to participate in Company B's defined benefit plan, which has a July 1 to June 30 plan year. 2012 federal tax forms 1040a Nick leaves Company B on December 31, 2012. 2012 federal tax forms 1040a Because Nick is eligible to participate in the plan for its year ending June 30, 2013, he is covered by the plan for his 2013 tax year. 2012 federal tax forms 1040a No vested interest. 2012 federal tax forms 1040a   If you accrue a benefit for a plan year, you are covered by that plan even if you have no vested interest in (legal right to) the accrual. 2012 federal tax forms 1040a Situations in Which You Are Not Covered Unless you are covered by another employer plan, you are not covered by an employer plan if you are in one of the situations described below. 2012 federal tax forms 1040a Social security or railroad retirement. 2012 federal tax forms 1040a   Coverage under social security or railroad retirement is not coverage under an employer retirement plan. 2012 federal tax forms 1040a Benefits from previous employer's plan. 2012 federal tax forms 1040a   If you receive retirement benefits from a previous employer's plan, you are not covered by that plan. 2012 federal tax forms 1040a Reservists. 2012 federal tax forms 1040a   If the only reason you participate in a plan is because you are a member of a reserve unit of the Armed Forces, you may not be covered by the plan. 2012 federal tax forms 1040a You are not covered by the plan if both of the following conditions are met. 2012 federal tax forms 1040a The plan you participate in is established for its employees by: The United States, A state or political subdivision of a state, or An instrumentality of either (a) or (b) above. 2012 federal tax forms 1040a You did not serve more than 90 days on active duty during the year (not counting duty for training). 2012 federal tax forms 1040a Volunteer firefighters. 2012 federal tax forms 1040a   If the only reason you participate in a plan is because you are a volunteer firefighter, you may not be covered by the plan. 2012 federal tax forms 1040a You are not covered by the plan if both of the following conditions are met. 2012 federal tax forms 1040a The plan you participate in is established for its employees by: The United States, A state or political subdivision of a state, or An instrumentality of either (a) or (b) above. 2012 federal tax forms 1040a Your accrued retirement benefits at the beginning of the year will not provide more than $1,800 per year at retirement. 2012 federal tax forms 1040a Limit if Covered by Employer Plan As discussed earlier, the deduction you can take for contributions made to your traditional IRA depends on whether you or your spouse was covered for any part of the year by an employer retirement plan. 2012 federal tax forms 1040a Your deduction is also affected by how much income you had and by your filing status. 2012 federal tax forms 1040a Your deduction may also be affected by social security benefits you received. 2012 federal tax forms 1040a Reduced or no deduction. 2012 federal tax forms 1040a   If either you or your spouse was covered by an employer retirement plan, you may be entitled to only a partial (reduced) deduction or no deduction at all, depending on your income and your filing status. 2012 federal tax forms 1040a   Your deduction begins to decrease (phase out) when your income rises above a certain amount and is eliminated altogether when it reaches a higher amount. 2012 federal tax forms 1040a These amounts vary depending on your filing status. 2012 federal tax forms 1040a   To determine if your deduction is subject to the phaseout, you must determine your modified adjusted gross income (AGI) and your filing status, as explained later under Deduction Phaseout . 2012 federal tax forms 1040a Once you have determined your modified AGI and your filing status, you can use Table 1-2 or Table 1-3 to determine if the phaseout applies. 2012 federal tax forms 1040a Social Security Recipients Instead of using Table 1-2 or Table 1-3 and Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013, later, complete the worksheets in Appendix B of this publication if, for the year, all of the following apply. 2012 federal tax forms 1040a You received social security benefits. 2012 federal tax forms 1040a You received taxable compensation. 2012 federal tax forms 1040a Contributions were made to your traditional IRA. 2012 federal tax forms 1040a You or your spouse was covered by an employer retirement plan. 2012 federal tax forms 1040a Use the worksheets in Appendix B to figure your IRA deduction, your nondeductible contribution, and the taxable portion, if any, of your social security benefits. 2012 federal tax forms 1040a Appendix B includes an example with filled-in worksheets to assist you. 2012 federal tax forms 1040a Table 1-2. 2012 federal tax forms 1040a Effect of Modified AGI1 on Deduction if You Are Covered by a Retirement Plan at Work If you are covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction. 2012 federal tax forms 1040a IF your filing status is . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a AND your modified adjusted gross income (modified AGI) is . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a THEN you can take . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a single or head of household $59,000 or less a full deduction. 2012 federal tax forms 1040a more than $59,000 but less than $69,000 a partial deduction. 2012 federal tax forms 1040a $69,000 or more no deduction. 2012 federal tax forms 1040a married filing jointly or  qualifying widow(er) $95,000 or less a full deduction. 2012 federal tax forms 1040a more than $95,000 but less than $115,000 a partial deduction. 2012 federal tax forms 1040a $115,000 or more no deduction. 2012 federal tax forms 1040a married filing separately2 less than $10,000 a partial deduction. 2012 federal tax forms 1040a $10,000 or more no deduction. 2012 federal tax forms 1040a 1 Modified AGI (adjusted gross income). 2012 federal tax forms 1040a See Modified adjusted gross income (AGI) , later. 2012 federal tax forms 1040a  2 If you did not live with your spouse at any time during the year, your filing status is considered Single for this purpose (therefore, your IRA deduction is determined under the “Single” filing status). 2012 federal tax forms 1040a Table 1-3. 2012 federal tax forms 1040a Effect of Modified AGI1 on Deduction if You Are NOT Covered by a Retirement Plan at Work If you are not covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction. 2012 federal tax forms 1040a IF your filing status is . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a AND your modified adjusted gross income (modified AGI) is . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a THEN you can take . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a single, head of household, or qualifying widow(er) any amount a full deduction. 2012 federal tax forms 1040a married filing jointly or separately with a spouse who is not covered by a plan at work any amount a full deduction. 2012 federal tax forms 1040a married filing jointly with a spouse who is covered by a plan at work $178,000 or less a full deduction. 2012 federal tax forms 1040a more than $178,000 but less than $188,000 a partial deduction. 2012 federal tax forms 1040a $188,000 or more no deduction. 2012 federal tax forms 1040a married filing separately with a spouse who is covered by a plan at work2 less than $10,000 a partial deduction. 2012 federal tax forms 1040a $10,000 or more no deduction. 2012 federal tax forms 1040a 1 Modified AGI (adjusted gross income). 2012 federal tax forms 1040a See Modified adjusted gross income (AGI) , later. 2012 federal tax forms 1040a  2 You are entitled to the full deduction if you did not live with your spouse at any time during the year. 2012 federal tax forms 1040a For 2014, if you are not covered by a retirement plan at work and you are married filing jointly with a spouse who is covered by a plan at work, your deduction is phased out if your modified AGI is more than $181,000 but less than $191,000. 2012 federal tax forms 1040a If your AGI is $191,000 or more, you cannot take a deduction for a contribution to a traditional IRA. 2012 federal tax forms 1040a Deduction Phaseout The amount of any reduction in the limit on your IRA deduction (phaseout) depends on whether you or your spouse was covered by an employer retirement plan. 2012 federal tax forms 1040a Covered by a retirement plan. 2012 federal tax forms 1040a   If you are covered by an employer retirement plan and you did not receive any social security retirement benefits, your IRA deduction may be reduced or eliminated depending on your filing status and modified AGI, as shown in Table 1-2. 2012 federal tax forms 1040a For 2014, if you are covered by a retirement plan at work, your IRA deduction will not be reduced (phased out) unless your modified AGI is: More than $60,000 but less than $70,000 for a single individual (or head of household), More than $96,000 but less than $116,000 for a married couple filing a joint return (or a qualifying widow(er)), or Less than $10,000 for a married individual filing a separate return. 2012 federal tax forms 1040a If your spouse is covered. 2012 federal tax forms 1040a   If you are not covered by an employer retirement plan, but your spouse is, and you did not receive any social security benefits, your IRA deduction may be reduced or eliminated entirely depending on your filing status and modified AGI as shown in Table 1-3. 2012 federal tax forms 1040a Filing status. 2012 federal tax forms 1040a   Your filing status depends primarily on your marital status. 2012 federal tax forms 1040a For this purpose, you need to know if your filing status is single or head of household, married filing jointly or qualifying widow(er), or married filing separately. 2012 federal tax forms 1040a If you need more information on filing status, see Publication 501, Exemptions, Standard Deduction, and Filing Information. 2012 federal tax forms 1040a Lived apart from spouse. 2012 federal tax forms 1040a   If you did not live with your spouse at any time during the year and you file a separate return, your filing status, for this purpose, is single. 2012 federal tax forms 1040a Modified adjusted gross income (AGI). 2012 federal tax forms 1040a   You can use Worksheet 1-1 to figure your modified AGI. 2012 federal tax forms 1040a If you made contributions to your IRA for 2013 and received a distribution from your IRA in 2013, see Both contributions for 2013 and distributions in 2013 , later. 2012 federal tax forms 1040a    Do not assume that your modified AGI is the same as your compensation. 2012 federal tax forms 1040a Your modified AGI may include income in addition to your compensation (discussed earlier) such as interest, dividends, and income from IRA distributions. 2012 federal tax forms 1040a Form 1040. 2012 federal tax forms 1040a   If you file Form 1040, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following amounts. 2012 federal tax forms 1040a IRA deduction. 2012 federal tax forms 1040a Student loan interest deduction. 2012 federal tax forms 1040a Tuition and fees deduction. 2012 federal tax forms 1040a Domestic production activities deduction. 2012 federal tax forms 1040a Foreign earned income exclusion. 2012 federal tax forms 1040a Foreign housing exclusion or deduction. 2012 federal tax forms 1040a Exclusion of qualified savings bond interest shown on Form 8815. 2012 federal tax forms 1040a Exclusion of employer-provided adoption benefits shown on Form 8839. 2012 federal tax forms 1040a This is your modified AGI. 2012 federal tax forms 1040a Form 1040A. 2012 federal tax forms 1040a   If you file Form 1040A, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following amounts. 2012 federal tax forms 1040a IRA deduction. 2012 federal tax forms 1040a Student loan interest deduction. 2012 federal tax forms 1040a Tuition and fees deduction. 2012 federal tax forms 1040a Exclusion of qualified savings bond interest shown on Form 8815. 2012 federal tax forms 1040a This is your modified AGI. 2012 federal tax forms 1040a Form 1040NR. 2012 federal tax forms 1040a   If you file Form 1040NR, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following amounts. 2012 federal tax forms 1040a IRA deduction. 2012 federal tax forms 1040a Student loan interest deduction. 2012 federal tax forms 1040a Domestic production activities deduction. 2012 federal tax forms 1040a Exclusion of qualified savings bond interest shown on Form 8815. 2012 federal tax forms 1040a Exclusion of employer-provided adoption benefits shown on Form 8839. 2012 federal tax forms 1040a This is your modified AGI. 2012 federal tax forms 1040a Income from IRA distributions. 2012 federal tax forms 1040a   If you received distributions in 2013 from one or more traditional IRAs and your traditional IRAs include only deductible contributions, the distributions are fully taxable and are included in your modified AGI. 2012 federal tax forms 1040a Both contributions for 2013 and distributions in 2013. 2012 federal tax forms 1040a   If all three of the following apply, any IRA distributions you received in 2013 may be partly tax free and partly taxable. 2012 federal tax forms 1040a You received distributions in 2013 from one or more traditional IRAs, You made contributions to a traditional IRA for 2013, and Some of those contributions may be nondeductible contributions. 2012 federal tax forms 1040a (See Nondeductible Contributions and Worksheet 1-2, later. 2012 federal tax forms 1040a ) If this is your situation, you must figure the taxable part of the traditional IRA distribution before you can figure your modified AGI. 2012 federal tax forms 1040a To do this, you can use Worksheet 1-5, later. 2012 federal tax forms 1040a   If at least one of the above does not apply, figure your modified AGI using Worksheet 1-1, later. 2012 federal tax forms 1040a How To Figure Your Reduced IRA Deduction If you or your spouse is covered by an employer retirement plan and you did not receive any social security benefits, you can figure your reduced IRA deduction by using Worksheet 1-2. 2012 federal tax forms 1040a Figuring Your Reduced IRA Deduction for 2013. 2012 federal tax forms 1040a The Instructions for Form 1040, Form 1040A, and Form 1040NR include similar worksheets that you can use instead of the worksheet in this publication. 2012 federal tax forms 1040a If you or your spouse is covered by an employer retirement plan, and you received any social security benefits, see Social Security Recipients , earlier. 2012 federal tax forms 1040a Note. 2012 federal tax forms 1040a If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. 2012 federal tax forms 1040a Worksheet 1-1. 2012 federal tax forms 1040a Figuring Your Modified AGI Use this worksheet to figure your modified AGI for traditional IRA purposes. 2012 federal tax forms 1040a 1. 2012 federal tax forms 1040a Enter your adjusted gross income (AGI) from Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37, figured without taking into account the amount from Form 1040, line 32; Form 1040A, line 17; or Form 1040NR, line 32 1. 2012 federal tax forms 1040a   2. 2012 federal tax forms 1040a Enter any student loan interest deduction from Form 1040, line 33; Form 1040A, line 18; or Form 1040NR, line 33 2. 2012 federal tax forms 1040a   3. 2012 federal tax forms 1040a Enter any tuition and fees deduction from Form 1040, line 34, or Form 1040A, line 19 3. 2012 federal tax forms 1040a   4. 2012 federal tax forms 1040a Enter any domestic production activities deduction from Form 1040, line 35, or Form 1040NR, line 34 4. 2012 federal tax forms 1040a   5. 2012 federal tax forms 1040a Enter any foreign earned income exclusion and/or housing exclusion from Form 2555, line 45, or Form 2555-EZ, line 18 5. 2012 federal tax forms 1040a   6. 2012 federal tax forms 1040a Enter any foreign housing deduction from Form 2555, line 50 6. 2012 federal tax forms 1040a   7. 2012 federal tax forms 1040a Enter any excludable savings bond interest from Form 8815, line 14 7. 2012 federal tax forms 1040a   8. 2012 federal tax forms 1040a Enter any excluded employer-provided adoption benefits from Form 8839, line 28 8. 2012 federal tax forms 1040a   9. 2012 federal tax forms 1040a Add lines 1 through 8. 2012 federal tax forms 1040a This is your Modified AGI for traditional IRA purposes 9. 2012 federal tax forms 1040a   Reporting Deductible Contributions If you file Form 1040, enter your IRA deduction on line 32 of that form. 2012 federal tax forms 1040a If you file Form 1040A, enter your IRA deduction on line 17 of that form. 2012 federal tax forms 1040a If you file Form 1040NR, enter your IRA deduction on line 32 of that form. 2012 federal tax forms 1040a You cannot deduct IRA contributions on Form 1040EZ or Form 1040NR-EZ. 2012 federal tax forms 1040a Self-employed. 2012 federal tax forms 1040a   If you are self-employed (a sole proprietor or partner) and have a SIMPLE IRA, enter your deduction for allowable plan contributions on Form 1040, line 28. 2012 federal tax forms 1040a If you file Form 1040NR, enter your deduction on line 28 of that form. 2012 federal tax forms 1040a Nondeductible Contributions Although your deduction for IRA contributions may be reduced or eliminated, contributions can be made to your IRA of up to the general limit or, if it applies, the Kay Bailey Hutchison Spousal IRA limit. 2012 federal tax forms 1040a The difference between your total permitted contributions and your IRA deduction, if any, is your nondeductible contribution. 2012 federal tax forms 1040a Example. 2012 federal tax forms 1040a Tony is 29 years old and single. 2012 federal tax forms 1040a In 2013, he was covered by a retirement plan at work. 2012 federal tax forms 1040a His salary is $62,000. 2012 federal tax forms 1040a His modified AGI is $70,000. 2012 federal tax forms 1040a Tony makes a $5,500 IRA contribution for 2013. 2012 federal tax forms 1040a Because he was covered by a retirement plan and his modified AGI is above $69,000, he cannot deduct his $5,500 IRA contribution. 2012 federal tax forms 1040a He must designate this contribution as a nondeductible contribution by reporting it on Form 8606. 2012 federal tax forms 1040a Repayment of reservist distributions. 2012 federal tax forms 1040a   Nondeductible contributions may include repayments of qualified reservist distributions. 2012 federal tax forms 1040a For more information, see Qualified reservist repayments under How Much Can Be Contributed, earlier. 2012 federal tax forms 1040a Form 8606. 2012 federal tax forms 1040a   To designate contributions as nondeductible, you must file Form 8606. 2012 federal tax forms 1040a (See the filled-in Forms 8606 in this chapter. 2012 federal tax forms 1040a )   You do not have to designate a contribution as nondeductible until you file your tax return. 2012 federal tax forms 1040a When you file, you can even designate otherwise deductible contributions as nondeductible contributions. 2012 federal tax forms 1040a   You must file Form 8606 to report nondeductible contributions even if you do not have to file a tax return for the year. 2012 federal tax forms 1040a    A Form 8606 is not used for the year that you make a rollover from a qualified retirement plan to a traditional IRA and the rollover includes nontaxable amounts. 2012 federal tax forms 1040a In those situations, a Form 8606 is completed for the year you take a distribution from that IRA. 2012 federal tax forms 1040a See Form 8606 under Distributions Fully or Partly Taxable, later. 2012 federal tax forms 1040a Failure to report nondeductible contributions. 2012 federal tax forms 1040a   If you do not report nondeductible contributions, all of the contributions to your traditional IRA will be treated like deductible contributions when withdrawn. 2012 federal tax forms 1040a All distributions from your IRA will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. 2012 federal tax forms 1040a Penalty for overstatement. 2012 federal tax forms 1040a   If you overstate the amount of nondeductible contributions on your Form 8606 for any tax year, you must pay a penalty of $100 for each overstatement, unless it was due to reasonable cause. 2012 federal tax forms 1040a Penalty for failure to file Form 8606. 2012 federal tax forms 1040a   You will have to pay a $50 penalty if you do not file a required Form 8606, unless you can prove that the failure was due to reasonable cause. 2012 federal tax forms 1040a Tax on earnings on nondeductible contributions. 2012 federal tax forms 1040a   As long as contributions are within the contribution limits, none of the earnings or gains on contributions (deductible or nondeductible) will be taxed until they are distributed. 2012 federal tax forms 1040a Cost basis. 2012 federal tax forms 1040a   You will have a cost basis in your traditional IRA if you made any nondeductible contributions. 2012 federal tax forms 1040a Your cost basis is the sum of the nondeductible contributions to your IRA minus any withdrawals or distributions of nondeductible contributions. 2012 federal tax forms 1040a    Commonly, distributions from your traditional IRAs will include both taxable and nontaxable (cost basis) amounts. 2012 federal tax forms 1040a See Are Distributions Taxable, later, for more information. 2012 federal tax forms 1040a Recordkeeping. 2012 federal tax forms 1040a There is a recordkeeping worksheet, Appendix A. 2012 federal tax forms 1040a Summary Record of Traditional IRA(s) for 2013 , that you can use to keep a record of deductible and nondeductible IRA contributions. 2012 federal tax forms 1040a Examples — Worksheet for Reduced IRA Deduction for 2013 The following examples illustrate the use of Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013. 2012 federal tax forms 1040a Example 1. 2012 federal tax forms 1040a For 2013, Tom and Betty file a joint return on Form 1040. 2012 federal tax forms 1040a They are both 39 years old. 2012 federal tax forms 1040a They are both employed and Tom is covered by his employer's retirement plan. 2012 federal tax forms 1040a Tom's salary is $59,000 and Betty's is $32,555. 2012 federal tax forms 1040a They each have a traditional IRA and their combined modified AGI, which includes $5,000 interest and dividend income, is $96,555. 2012 federal tax forms 1040a Because their modified AGI is between $95,000 and $115,000 and Tom is covered by an employer plan, Tom is subject to the deduction phaseout discussed earlier under Limit if Covered by Employer Plan . 2012 federal tax forms 1040a For 2013, Tom contributed $5,500 to his IRA and Betty contributed $5,500 to hers. 2012 federal tax forms 1040a Even though they file a joint return, they must use separate worksheets to figure the IRA deduction for each of them. 2012 federal tax forms 1040a Tom can take a deduction of only $5,080. 2012 federal tax forms 1040a He can choose to treat the $5,080 as either deductible or nondeductible contributions. 2012 federal tax forms 1040a He can either leave the $420 ($5,500 − $5,080) of nondeductible contributions in his IRA or withdraw them by April 15, 2014. 2012 federal tax forms 1040a He decides to treat the $5,080 as deductible contributions and leave the $420 of nondeductible contributions in his IRA. 2012 federal tax forms 1040a Using Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013, Tom figures his deductible and nondeductible amounts as shown on Worksheet 1-2. 2012 federal tax forms 1040a Figuring Your Reduced IRA Deduction for 2013—Example 1 Illustrated. 2012 federal tax forms 1040a Betty figures her IRA deduction as follows. 2012 federal tax forms 1040a Betty can treat all or part of her contributions as either deductible or nondeductible. 2012 federal tax forms 1040a This is because her $5,500 contribution for 2013 is not subject to the deduction phaseout discussed earlier under Limit if Covered by Employer Plan . 2012 federal tax forms 1040a She does not need to use Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013, because their modified AGI is not within the phaseout range that applies. 2012 federal tax forms 1040a Betty decides to treat her $5,500 IRA contributions as deductible. 2012 federal tax forms 1040a The IRA deductions of $5,080 and $5,500 on the joint return for Tom and Betty total $10,580. 2012 federal tax forms 1040a Example 2. 2012 federal tax forms 1040a For 2013, Ed and Sue file a joint return on Form 1040. 2012 federal tax forms 1040a They are both 39 years old. 2012 federal tax forms 1040a Ed is covered by his employer's retirement plan. 2012 federal tax forms 1040a Ed's salary is $45,000. 2012 federal tax forms 1040a Sue had no compensation for the year and did not contribute to an IRA. 2012 federal tax forms 1040a Sue is not covered by an employer plan. 2012 federal tax forms 1040a Ed contributed $5,500 to his traditional IRA and $5,500 to a traditional IRA for Sue (a Kay Bailey Hutchison Spousal IRA). 2012 federal tax forms 1040a Their combined modified AGI, which includes $2,000 interest and dividend income and a large capital gain from the sale of stock, is $180,555. 2012 federal tax forms 1040a Because the combined modified AGI is $115,000 or more, Ed cannot deduct any of the contribution to his traditional IRA. 2012 federal tax forms 1040a He can either leave the $5,500 of nondeductible contributions in his IRA or withdraw them by April 15, 2014. 2012 federal tax forms 1040a Sue figures her IRA deduction as shown on Worksheet 1-2. 2012 federal tax forms 1040a Figuring Your Reduced IRA Deduction for 2013—Example 2 Illustrated. 2012 federal tax forms 1040a Worksheet 1-2. 2012 federal tax forms 1040a Figuring Your Reduced IRA Deduction for 2013 (Use only if you or your spouse is covered by an employer plan and your modified AGI falls between the two amounts shown below for your coverage situation and filing status. 2012 federal tax forms 1040a ) Note. 2012 federal tax forms 1040a If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. 2012 federal tax forms 1040a IF you . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a AND your  filing status is . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a AND your modified AGI is over . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a THEN enter on  line 1 below . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a       are covered by an employer plan single or head of household $59,000 $69,000     married filing jointly or qualifying widow(er) $95,000 $115,000     married filing separately $0 $10,000     are not covered by an employer plan, but your spouse is covered married filing jointly $178,000 $188,000     married filing separately $0 $10,000     1. 2012 federal tax forms 1040a Enter applicable amount from table above 1. 2012 federal tax forms 1040a   2. 2012 federal tax forms 1040a Enter your modified AGI (that of both spouses, if married filing jointly) 2. 2012 federal tax forms 1040a     Note. 2012 federal tax forms 1040a If line 2 is equal to or more than the amount on line 1, stop here. 2012 federal tax forms 1040a  Your IRA contributions are not deductible. 2012 federal tax forms 1040a See Nondeductible Contributions , earlier. 2012 federal tax forms 1040a     3. 2012 federal tax forms 1040a Subtract line 2 from line 1. 2012 federal tax forms 1040a If line 3 is $10,000 or more ($20,000 or more if married filing jointly or qualifying widow(er) and you are covered by an employer plan), stop here. 2012 federal tax forms 1040a You can take a full IRA deduction for contributions of up to $5,500 ($6,500 if you are age 50 or older) or 100% of your (and if married filing jointly, your spouse's) compensation, whichever is less 3. 2012 federal tax forms 1040a   4. 2012 federal tax forms 1040a Multiply line 3 by the percentage below that applies to you. 2012 federal tax forms 1040a If the result is not a multiple of $10, round it to the next highest multiple of $10. 2012 federal tax forms 1040a (For example, $611. 2012 federal tax forms 1040a 40 is rounded to $620. 2012 federal tax forms 1040a ) However, if the result is less than $200, enter $200. 2012 federal tax forms 1040a         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. 2012 federal tax forms 1040a 5% (. 2012 federal tax forms 1040a 275) (by 32. 2012 federal tax forms 1040a 5% (. 2012 federal tax forms 1040a 325) if you are age 50 or older). 2012 federal tax forms 1040a All others, multiply line 3 by 55% (. 2012 federal tax forms 1040a 55) (by 65% (. 2012 federal tax forms 1040a 65) if you are age 50 or older). 2012 federal tax forms 1040a 4. 2012 federal tax forms 1040a   5. 2012 federal tax forms 1040a Enter your compensation minus any deductions on Form 1040 or Form 1040NR, line 27 (deductible part of self-employment tax) and line 28 (self-employed SEP, SIMPLE, and qualified plans). 2012 federal tax forms 1040a If you are filing a joint return and your compensation is less than your spouse's, include your spouse's compensation reduced by his or her traditional IRA and Roth IRA contributions for this year. 2012 federal tax forms 1040a If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. 2012 federal tax forms 1040a   6. 2012 federal tax forms 1040a Enter contributions made, or to be made, to your IRA for 2013, but do not enter more than $5,500 ($6,500 if you are age 50 or older). 2012 federal tax forms 1040a If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. 2012 federal tax forms 1040a 6. 2012 federal tax forms 1040a   7. 2012 federal tax forms 1040a IRA deduction. 2012 federal tax forms 1040a Compare lines 4, 5, and 6. 2012 federal tax forms 1040a Enter the smallest amount (or a smaller amount if you choose) here and on the Form 1040, 1040A, or 1040NR line for your IRA, whichever applies. 2012 federal tax forms 1040a If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. 2012 federal tax forms 1040a   8. 2012 federal tax forms 1040a Nondeductible contribution. 2012 federal tax forms 1040a Subtract line 7 from line 5 or 6, whichever is smaller. 2012 federal tax forms 1040a  Enter the result here and on line 1 of your Form 8606 8. 2012 federal tax forms 1040a   Worksheet 1-2. 2012 federal tax forms 1040a Figuring Your Reduced IRA Deduction for 2013—Example 1 Illustrated (Use only if you or your spouse is covered by an employer plan and your modified AGI falls between the two amounts shown below for your coverage situation and filing status. 2012 federal tax forms 1040a ) Note. 2012 federal tax forms 1040a If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. 2012 federal tax forms 1040a IF you . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a AND your  filing status is . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a AND your modified AGI is over . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a THEN enter on  line 1 below . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a       are covered by an employer plan single or head of household $59,000 $69,000     married filing jointly or qualifying widow(er) $95,000 $115,000     married filing separately $0 $10,000     are not covered by an employer plan, but your spouse is covered married filing jointly $178,000 $188,000     married filing separately $0 $10,000     1. 2012 federal tax forms 1040a Enter applicable amount from table above 1. 2012 federal tax forms 1040a 115,000 2. 2012 federal tax forms 1040a Enter your modified AGI (that of both spouses, if married filing jointly) 2. 2012 federal tax forms 1040a 96,555   Note. 2012 federal tax forms 1040a If line 2 is equal to or more than the amount on line 1, stop here. 2012 federal tax forms 1040a  Your IRA contributions are not deductible. 2012 federal tax forms 1040a See Nondeductible Contributions , earlier. 2012 federal tax forms 1040a     3. 2012 federal tax forms 1040a Subtract line 2 from line 1. 2012 federal tax forms 1040a If line 3 is $10,000 or more ($20,000 or more if married filing jointly or qualifying widow(er) and you are covered by an employer plan), stop here. 2012 federal tax forms 1040a You can take a full IRA deduction for contributions of up to $5,500 ($6,500 if you are age 50 or older) or 100% of your (and if married filing jointly, your spouse's) compensation, whichever is less 3. 2012 federal tax forms 1040a 18,445 4. 2012 federal tax forms 1040a Multiply line 3 by the percentage below that applies to you. 2012 federal tax forms 1040a If the result is not a multiple of $10, round it to the next highest multiple of $10. 2012 federal tax forms 1040a (For example, $611. 2012 federal tax forms 1040a 40 is rounded to $620. 2012 federal tax forms 1040a ) However, if the result is less than $200, enter $200. 2012 federal tax forms 1040a         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. 2012 federal tax forms 1040a 5% (. 2012 federal tax forms 1040a 275) (by 32. 2012 federal tax forms 1040a 5% (. 2012 federal tax forms 1040a 325) if you are age 50 or older). 2012 federal tax forms 1040a All others, multiply line 3 by 55% (. 2012 federal tax forms 1040a 55) (by 65% (. 2012 federal tax forms 1040a 65) if you are age 50 or older). 2012 federal tax forms 1040a 4. 2012 federal tax forms 1040a 5,080 5. 2012 federal tax forms 1040a Enter your compensation minus any deductions on Form 1040 or Form 1040NR, line 27 (deductible part of self-employment tax) and line 28 (self-employed SEP, SIMPLE, and qualified plans). 2012 federal tax forms 1040a If you are filing a joint return and your compensation is less than your spouse's, include your spouse's compensation reduced by his or her traditional IRA and Roth IRA contributions for this year. 2012 federal tax forms 1040a If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. 2012 federal tax forms 1040a 59,000 6. 2012 federal tax forms 1040a Enter contributions made, or to be made, to your IRA for 2013, but do not enter more than $5,500 ($6,500 if you are age 50 or older). 2012 federal tax forms 1040a If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. 2012 federal tax forms 1040a 6. 2012 federal tax forms 1040a 5,500 7. 2012 federal tax forms 1040a IRA deduction. 2012 federal tax forms 1040a Compare lines 4, 5, and 6. 2012 federal tax forms 1040a Enter the smallest amount (or a smaller amount if you choose) here and on the Form 1040, 1040A, or 1040NR line for your IRA, whichever applies. 2012 federal tax forms 1040a If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. 2012 federal tax forms 1040a 5,080 8. 2012 federal tax forms 1040a Nondeductible contribution. 2012 federal tax forms 1040a Subtract line 7 from line 5 or 6, whichever is smaller. 2012 federal tax forms 1040a  Enter the result here and on line 1 of your Form 8606 8. 2012 federal tax forms 1040a 420 Worksheet 1-2. 2012 federal tax forms 1040a Figuring Your Reduced IRA Deduction for 2013—Example 2 Illustrated (Use only if you or your spouse is covered by an employer plan and your modified AGI falls between the two amounts shown below for your coverage situation and filing status. 2012 federal tax forms 1040a ) Note. 2012 federal tax forms 1040a If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. 2012 federal tax forms 1040a IF you . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a AND your  filing status is . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a AND your modified AGI is over . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a THEN enter on  line 1 below . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a . 2012 federal tax forms 1040a       are covered by an employer plan single or head of household $59,000 $69,000     married filing jointly or qualifying widow(er) $95,000 $115,000     married filing separately $0 $10,000     are not covered by an employer plan, but your spouse is covered married filing jointly $178,000 $188,000     married filing separately $0 $10,000     1. 2012 federal tax forms 1040a Enter applicable amount from table above 1. 2012 federal tax forms 1040a 188,000 2. 2012 federal tax forms 1040a Enter your modified AGI (that of both spouses, if married filing jointly) 2. 2012 federal tax forms 1040a 180,555   Note. 2012 federal tax forms 1040a If line 2 is equal to or more than the amount on line 1, stop here. 2012 federal tax forms 1040a  Your IRA contributions are not deductible. 2012 federal tax forms 1040a See Nondeductible Contributions , earlier. 2012 federal tax forms 1040a     3. 2012 federal tax forms 1040a Subtract line 2 from line 1. 2012 federal tax forms 1040a If line 3 is $10,000 or more ($20,000 or more if married filing jointly or qualifying widow(er) and you are covered by an employer plan), stop here. 2012 federal tax forms 1040a You can take a full IRA deduction for contributions of up to $5,500 ($6,500 if you are age 50 or older) or 100% of your (and if married filing jointly, your spouse's) compensation, whichever is less 3. 2012 federal tax forms 1040a 7,445 4. 2012 federal tax forms 1040a Multiply line 3 by the percentage below that applies to you. 2012 federal tax forms 1040a If the result is not a multiple of $10, round it to the next highest multiple of $10. 2012 federal tax forms 1040a (For example, $611. 2012 federal tax forms 1040a 40 is rounded to $620. 2012 federal tax forms 1040a ) However, if the result is less than $200, enter $200. 2012 federal tax forms 1040a         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. 2012 federal tax forms 1040a 5% (. 2012 federal tax forms 1040a 275) (by 32. 2012 federal tax forms 1040a 5% (. 2012 federal tax forms 1040a 325) if you are age 50 or older). 2012 federal tax forms 1040a All others, multiply line 3 by 55% (. 2012 federal tax forms 1040a 55) (by 65% (. 2012 federal tax forms 1040a 65) if you are age 50 or older). 2012 federal tax forms 1040a 4. 2012 federal tax forms 1040a 4,100 5. 2012 federal tax forms 1040a Enter your compensation minus any deductions on Form 1040 or Form 1040NR, line 27 (deductible part of self-employment tax) and line 28 (self-employed SEP, SIMPLE, and qualified plans). 2012 federal tax forms 1040a If you are filing a joint return and your compensation is less than your spouse's, include your spouse's compensation reduced by his or her traditional IRA and Roth IRA contributions for this year. 2012 federal tax forms 1040a If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. 2012 federal tax forms 1040a 39,500 6. 2012 federal tax forms 1040a Enter contributions made, or to be made, to your IRA for 2013, but do not enter more than $5,500 ($6,500 if you are age 50 or older). 2012 federal tax forms 1040a If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. 2012 federal tax forms 1040a 6. 2012 federal tax forms 1040a 5,500 7. 2012 federal tax forms 1040a IRA deduction. 2012 federal tax forms 1040a Compare lines 4, 5, and 6. 2012 federal tax forms 1040a Enter the smallest amount (or a smaller amount if you choose) here and on the Form 1040, 1040A, or 1040NR line for your IRA, whichever applies. 2012 federal tax forms 1040a If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. 2012 federal tax forms 1040a 4,100 8. 2012 federal tax forms 1040a Nondeductible contribution. 2012 federal tax forms 1040a Subtract line 7 from line 5 or 6, whichever is smaller. 2012 federal tax forms 1040a  Enter the result here and on line 1 of your Form 8606 8. 2012 federal tax forms 1040a 1,400 What if You Inherit an IRA? If you inherit a traditional IRA, you are called a beneficiary. 2012 federal tax forms 1040a A beneficiary can be any person or entity the owner chooses to receive the benefits of the IRA after he or she dies. 2012 federal tax forms 1040a Beneficiaries of a traditional IRA must include in their gross income any taxable distributions they receive. 2012 federal tax forms 1040a Inherited from spouse. 2012 federal tax forms 1040a   If you inherit a traditional IRA from your spouse, you generally have the following three choices. 2012 federal tax forms 1040a You can: Treat it as your own IRA by designating yourself as the account owner. 2012 federal tax forms 1040a Treat it as your own by rolling it over into your IRA, or to the extent it is taxable, into a: Qualified employer plan, Qualified employee annuity plan (section 403(a) plan), Tax-sheltered annuity plan (s
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Tax Relief for Victims of Severe Storms, Straight-line Winds and Tornadoes in Indiana

IN-2012-14, March 12, 2012

DETROIT — Victims of the severe storms, straight-line winds and tornadoes that began on Feb. 29, 2012 in parts of Indiana may qualify for tax relief from the Internal Revenue Service.

The President has declared Clark, Jefferson, Ripley, Scott, Warrick and Washington counties a federal disaster area. Individuals who reside or have a business in these counties may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Feb. 29, and on or before May 31, have been postponed to May 31, 2012. This includes the April 17 deadline for filing 2011 individual income tax returns, making income tax payments and making 2011 contributions to an individual retirement account (IRA).  

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after Feb. 29, and on or before March 15, as long as the deposits are made by March 15, 2012.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 866-562-5227 to request this tax relief.

Covered Disaster Area

The counties listed above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and are entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until May 31 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Feb. 29 and on or before May 31.

The IRS also gives affected taxpayers until May 31 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), that are due to be performed on or after Feb. 29 and on or before May 31.

This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after Feb. 29 and on or before March 15 provided the taxpayer makes these deposits by March 15.

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.

Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “Indiana, Severe Storms, Straight-line Winds, and Tornadoes” at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS website, irs.gov, or order them by calling 800-TAX-FORM (800-829-3676). The IRS toll-free number for general tax questions is 800-829-1040.

Related Information

Page Last Reviewed or Updated: 30-Jan-2014

The 2012 Federal Tax Forms 1040a

2012 federal tax forms 1040a Tax Changes for Individuals Table of Contents 2001 ChangesNew 5-Year Carryback Rule for Net Operating Losses (NOLs) Wash Sale Rules Do Not Apply to Section 1256 Contracts Other 2001 Changes 2002 ChangesDeduction for Educator Expenses Personal Credits Still Allowed Against Alternative Minimum Tax Later ChangeChild and Dependent Care Expenses 2001 Changes New 5-Year Carryback Rule for Net Operating Losses (NOLs) If you have an NOL from a tax year ending during 2001 or 2002, you must generally carry back the entire amount of the NOL to the 5 tax years before the NOL year (the carryback period). 2012 federal tax forms 1040a However, you can still choose to use the previous carryback period. 2012 federal tax forms 1040a You also can choose not to carry back an NOL and only carry it forward. 2012 federal tax forms 1040a Individuals, estates, and trusts can file Form 1045, Application for Tentative Refund. 2012 federal tax forms 1040a The instructions for this form will be revised to reflect the new law. 2012 federal tax forms 1040a Wash Sale Rules Do Not Apply to Section 1256 Contracts The wash sale rules that generally apply to losses from the sale of stock or securities, do not apply to any loss arising from a section 1256 contract. 2012 federal tax forms 1040a A section 1256 contract is any: Regulated futures contract, Foreign currency contract, Nonequity option, Dealer equity option, or Dealer securities futures contract. 2012 federal tax forms 1040a Wash sales and section 1256 contracts are explained in detail in Publication 550, Investment Income and Expenses. 2012 federal tax forms 1040a Other 2001 Changes Other changes are discussed in the following chapters. 2012 federal tax forms 1040a Chapter 4 Car Expenses Chapter 5 Depreciation 2002 Changes Deduction for Educator Expenses If you are an eligible educator, you can deduct as an adjustment to income up to $250 in qualified expenses. 2012 federal tax forms 1040a You can deduct these expenses even if you do not itemize deductions on Schedule A (Form 1040). 2012 federal tax forms 1040a This adjustment to income is for expenses paid or incurred in tax years beginning during 2002 or 2003. 2012 federal tax forms 1040a Previously, these expenses were deductible only as a miscellaneous itemized deduction subject to the 2% of adjusted gross income limit. 2012 federal tax forms 1040a Eligible educator. 2012 federal tax forms 1040a   You are an eligible educator if, for the tax year, you meet the following requirements. 2012 federal tax forms 1040a You are a kindergarten through grade 12: Teacher, Instructor, Counselor, Principal, or Aide. 2012 federal tax forms 1040a You work at least 900 hours during a school year in a school that provides elementary or secondary education, as determined under state law. 2012 federal tax forms 1040a Qualified expenses. 2012 federal tax forms 1040a   These are unreimbursed expenses you paid or incurred for books, supplies, computer equipment (including related software and services), other equipment, and supplementary materials that you use in the classroom. 2012 federal tax forms 1040a For courses in health and physical education, expenses for supplies are qualified expenses only if they are related to athletics. 2012 federal tax forms 1040a   To be deductible as an adjustment to income, the qualified expenses must be more than the following amounts for the tax year. 2012 federal tax forms 1040a The interest on qualified U. 2012 federal tax forms 1040a S. 2012 federal tax forms 1040a savings bonds that you excluded from income because you paid qualified higher education expenses, Any distribution from a qualified tuition program that you excluded from income, or Any tax-free withdrawals from your Coverdell education savings account. 2012 federal tax forms 1040a Personal Credits Still Allowed Against Alternative Minimum Tax The provision that allowed certain nonrefundable personal credits to reduce both your regular tax and any alternative minimum tax (AMT) has been extended and will be in effect for 2002 and 2003. 2012 federal tax forms 1040a This provision, as it applies to the AMT, was originally scheduled to expire after 2001. 2012 federal tax forms 1040a Without the extension, these credits could not have been used to reduce any AMT in 2002 or 2003. 2012 federal tax forms 1040a Later Change Child and Dependent Care Expenses For the purpose of figuring the child and dependent care credit, your spouse is treated as having at least a minimum amount of earned income for any month that he or she is a full-time student or not able to care for himself or herself. 2012 federal tax forms 1040a Beginning in 2003, this amount is increased to $250 a month if there is one qualifying person and to $500 a month if there are two or more qualifying persons. 2012 federal tax forms 1040a Before 2003, the amounts were $200 and $400. 2012 federal tax forms 1040a The same rule applies for the exclusion of employer-provided dependent care benefits. 2012 federal tax forms 1040a For more information about the credit and exclusion, see Publication 503, Child and Dependent Care Expenses. 2012 federal tax forms 1040a Prev  Up  Next   Home   More Online Publications